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Create other policy instruments

Many financing tools work better with a larger pool of potential investments Table 3.15. Financing tools: Benefits and barriers

Benefits and barriers



  • - larger deal flow to attract investors
  • - possibility to develop specialised funds and expertise according to specific technological and or innovative sectors
  • - proximity favouring a climate of trust and network building Barriers:
  • - different national rules, tax regimes and regulations concerning investments
  • - insufficient critical mass of investment-ready firms
  • - HALO Business Angels in Ireland-Northern Ireland
  • - Euregional Business Angels Network in the TTR-ELAt

Finding the right financing sources is a crucial step in entrepreneurial activity. Venture capital funds and business angel networks invest need a sufficient level of deal flow to function well. In addition, they often operate in very specific sectors and technological domains. The combinations of those two aspects make a critical mass of firms and innovation activities in particular fields, essential for the development of such funding entities. In addition, business angel and venture capital investors often prefer to operate on a local basis where they can meet and visit the companies they invest in, thus helping build trust and establish relationships while allowing investors to mentor firms and monitor their performance.

For these reasons, the creation of networks of investors is particularly relevant for cross-border functional innovation areas with strong specialisations. Examples were found in Ireland-Northern Ireland and in the TTR-ELAt. The HALO/HBAN Business Angel programme is based on business angel syndicates throughout the island of Ireland (Box 3.18). Practical guides on taxes and other regulations to facilitate investments on both sides of the border have also been developed. In the TTR-ELAt, the Euregional Business Angel Network (EuBAN) was established in 2004, in the framework of the Euregio Meuse-Rhine, with support from Interreg funding. EuBan is a cross-border business angel network, established jointly by several cross border partners.9 The project was launched also thanks to the Interreg IIIA and the Region of Wallonia (Belgium). EuBAN helps to establish contacts between private investors and young entrepreneurs on a broader cross-border basis.

Box 3.18. HALO Business Angel Network (HBAN): Ireland-Northern Ireland

Although in its early stages, this cross-border policy instrument is unique for its emphasis on an under-represented area in innovation policy, financing support through business angel capital. HBAN is an all-island umbrella platform for business angel investors launched in 2011. This network aims to:

  • • stimulate angel investments
  • • empower angel investors to build and maintain an investment portfolio
  • • streamline the funding process for firms.

HBAN works on a regional basis, by establishing partnerships with Business Innovation Centres in Dublin, Cork, Waterford and Galway as well as with Halo Northern Ireland. Each of these centres runs local angel networks at a smaller scale. Trust and local social networks are crucial conditions for the well-functioning of syndicates, but at the same time gaining a sufficient critical mass is important to diversify investments. It has a network of seven investor syndicates as well as a large pool of private investors that operate on a cross-border basis. It also collects data on investors and has a database of about 150 private investors ready to meet early phase entrepreneurs. It aims to establish an all-island syndicate of investors in the near future. HBAN organises match-making events between investors and entrepreneurs and it has recently launched a guide for entrepreneurs called Raising Business Angel Investment. Insights for Entrepreneurs.

Sources: Nauwelaers, C., K. Maguire and G. Ajmone Marsan (2013d), “The case of Ireland-Northern Ireland (United Kingdom) - Regions and Innovation: Collaborating Across Borders”, OECD Regional Development Working Papers, No. 2013/20, OECD Publishing, Paris,

The border can be used as a source of innovation

Table 3.16. The border as a source of innovation: Benefits and barriers

Benefits and barriers



  • - unique opportunities for new innovations
  • - natural test bed for innovation projects
  • - first step to accessing a wider global market Barriers:
  • - some sectors highly regulated, rendering innovation collaboration more complex (e.g. healthcare, electricity)
  • - regulations for testing in different markets
  • - ICT and e-service collaboration in Helsinki-Tallinn
  • - Clinical Translational Research and Innovation Centre (C-TRIC) in Ireland-Northern Ireland (UK)

The border can itself be a source of innovation, an opportunity generally under-developed in the case studies. Sometimes national borders create the necessity and the demand for technologies and services to overcome practical and technical border barriers. As a consequence, cross-border regions should promote incentives to use the border as an opportunity to experiment or test technologies and services on a cross-border basis. In the TTR-ELAt, experiments and analysis for cross-border energy grid standards, transmission and solutions have been suggested. The cities of Helsinki and Tallinn are beginning to dialogue for the future development of an integrated transport system benefitting from the advanced e-services and ICT technologies on both sides. The future adoption in Finland of a data exchange layer of e-services, akin to the Estonian X-Road, will create further cross-border opportunities. In the cross-border area between San Diego, California (United States) and Baja California (Mexico), border crossing wait times can be up to three hours and at considerable economic cost to the cross-border region.10 The need to develop procedures and products to reduce the times associated with security checks has been raised as one opportunity for the region. Similarly, Estonian firms are researching e-identity card identification procedures over the border with Finland in order to speed up security lines and make checks faster and more secure. In Ireland-Northern Ireland, the Clinical Translational Research and Innovation Centre (C-TRIC) highlights that one of the cross-border benefits for collaboration is due to the border, as clinical testing trials can involve new populations as well provide opportunities to access the UK health system.

Innovation awards reinforce a culture of innovation and cross-border identity

Table 3.17. Innovation awards: Benefits and barriers

Benefits and barriers



  • - reinforces overall culture of innovation
  • - raises awareness of possible cross-border innovation partners
  • - contributes to cross-border regional identity Barriers:
  • - finding candidates
  • - only marginal impact or awareness
  • - Estonia-Finland Design Challenge
  • - Irish Times InterTradelreland Innovation Awards

Innovation awards serve multiple purposes. They raise awareness of the importance of innovation, in its various forms, to a wider audience. They can also help make actors more familiar with each other on both sides of the border. For example, in the TANDEM project in a cross-border area between Belgium and France, an event was held where the agreements for new cross-border projects were publically signed as recognition of the project potential. In Ireland-Northern Ireland, InterTradeIreland has entered the fifth year of a public-private partnership with the Irish Times to deliver the Irish Times InterTradeIreland Innovation Awards.11 In Estonia and Finland, a Design Challenge was used to raise awareness about design generally, areas for collaboration and the development of actual products (Box 3.19).

Box 3.19. Estonian and Finnish Design Challenge

The 2006-07 project “Estonian and Finnish Design Challenge”, funded under Interreg III A, aimed to develop new products, activity models and networks through co-operation between Finnish and Estonian designers and companies. The lead partner was Baltic Design & Interior Network from Finland, and the other partners were Estonian: the Business and Development Centre of Parnu County, the Vocational Centre of Parnu and TEHNOPOL.

During the project, ideas and solutions for furbishing public rooms were developed. The results were displayed at an exhibition, “Smart Hotel”, which took place in Tallinn and Helsinki. The project also targeted the markets of St. Petersburg. The project resulted in new innovative schedules and prototypes, co-operative networks between Estonian and Finnish designers and companies, a pilot model of “Design Start” and increased knowledge in design.


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